S. Africa:Oil-powered dollar just doesn't make cents

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Oil-powered dollar just doesn't make cents

September 18 2000 at 10:35AM

The South African rand hit a historic worst level of 7,2450 to the US dollar early on Monday morning. The fall was driven by rampant strength in the US dollar and renewed weakness in the euro.

Dealers also attributed the slide to stop-loss orders.

The rand slipped to a record worst level against the US dollar as offshore and local banks continued to offload large amounts of rands, with stops-loss selling exacerbating the move.

"In the short-term we just keep going weaker ... we really need a major realignment of the euro and, at the moment, it doesn't look like anything is going to weaken the US dollar," said a dealer.

Europeans seem unable to come to a consensus policy Another increase in crude oil prices to $36 a barrel drove the US dollar firmer against all other major currencies, being the only unit in which crude oil can be bought.

BridgeNews reports that the euro fell to a record low on Monday of 0,8510 to the US dollar, in part because European authorities seemed unable to come to a consensus policy toward the currency.

Traders said the market was concerned that inflation could be affected by the spike in oil prices.

Statistics South Africa is due to release August CPI data on Tuesday at 11.30am - Sapa-INet-Bridge

http://www.iol.co.za/frame_decider.php?click_id=594&art_id=qw969266101126R263&set_id=1

-- Martin Thompson (mthom1927@aol.com), September 18, 2000


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